A SUMMER TRAINING REPORT

ON

AUDIT PROCEDURE
AT

OJHA & ASSOCIATES

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT

FOR THE DEGREE OF

MBA (2 YEAR COURSE)

SUBMITTED TO: CORPORATE GUIDE:

Prof. AJIT Kr. SHUKLA Mr. RAMNIWAS SINGH
(DEAN & DIRECTOR) (CHARTERED ACCOUNTANT)
(DEPT. OF COMMERCE & MANAGEMENT)

SUBMITTED BY :

RUPAM SINGH

ROLL NO. 10019527018 (MBA) 3rd Sem

INSTITUTE OF MANAGEMENT STUDIES

MGKVP VARANASI
 Declaration

I RUPAM SINGH , a student of Institute of Management Studies (IMS), Mahatma

Gandhi Vidhyapith, Varanasi.

MBA Batch 2018 - 2019, Bearing Enrollment Number KA2K19/100527018 Hereby

Declared that the project work titled “AUDIT PROCEDURE”

Submitted to IMS is an original work of the under-designed and has not been
reproduced from any other sources.

RUPAM SINGH
MBA III semester
10019527018
 ACKNOWLEDGMENT

I take this responsibility to express my profound and sincere

gratitude to MBA, IMS MGKVP for providing me with the
opportunity to explore the corridors of the corporate world and
gather invaluable knowledge and practical experience via the
Summer Training Project.

I take the privilege of offering a deep sense of gratitude and

indebtedness to Dr. DILEEP KUMAR SINGH for providing me
their able guidance and inspiration to complete the Summer
Training Report.

I express my sincere gratitude to MR. RAMNIWAS SINGH who

guided me how to carry on with the project. Her able guidance
and support have been constant source of knowledge and
motivation for me.

I wish to give my sincere regards to my respected teachers who

guided me to build a concrete platform before sending me on
training so that I can land out firmly in all respects.

My parents blessing and co-operation from entire family & Friends

had been my strength to complete this study.

RUPAM SINGH
 CONTENT

1. Profile of the firm

2. Executive summary

3. Definition Audit Procedure

4. Definition of Audit

5. Function of audit

6. Objective of audit

7. Scope of Audit

8. Classification of audit

9. Basic principle of audit

10. Advantage and Disadvantage Of Audit

11. Audit procedure & followed by OJHA & ASSOCIATES

12. Research Methodology

13. Conclusion

14. Bibliography
 OBJECTIVE OF THE STUDY

A Summer Internship program is an ideal way to learn about a chartered

account and to simply grab the skills working under guidance and
supervision of experienced employees. As a first year student of MASTER
OF BUSINESS ADMINISTRATION, we get an exposure to the real
business world. Between the first and the sound academics years, this is a
valuable source of learning.

In practical only project report is not required there must be some

objectives or goal because without any goal or objective, no project report
can be completed of some work that is assigned to you for some reasons:

The subject or papers that is being thought in the classroom is completely

theoretical so during the summer training you can compare and learn how
the activity in an organization varies with theory and how this theoretical
knowledge is being applied in an organization and how much they are
being applicable to it’s quite helpful to know and understand.
 Firms Profile
Background
Ojha & Associates is a leading chartered accountancy firm rendering
comprehensive professional services which include audit, management
consultancy, tax consultancy, accounting services, manpower
management, Ojha & Associates is a professionally managed partnership
firm. The Team consists of distinguished Chartered Accountants, corporate
financial advisors and tax consultants. The firm represents a combination of
specialized skills, which are geared to offers sound financial advice and
personalized proactive services. Those associated with the firm have
regular interaction with industry and other professionals which enables the
firm to keep pace with contemporary developments and to meet the needs
of its clients.

Our Commitment
We are committed to provide consistent, customized and workable
solutions to our clients and strive to support our services with the highest
level of professionalism, efficiency and technology.

Vision
To accomplish the assignment through the experience of firm’s partners &
professional staff and also to arrange specific technical expertise from our
associates of various streams of professions.
 EXECUTIVE SUMMARY

This report represents the results of Audit Procedure:

An audit procedure is needed before the auditor has enough
information to decide whether a client's financial statements fairly
represent its financial results, financial position, and cash flows. Audit
procedures are used by auditors to determine the quality of the financial
information being provided by their clients. Here are several general
classifications of audit procedures

Classification testing - Audit procedures are used to decide whether

transactions were classified correctly in the accounting records.

Completeness testing -Audit procedures can test to see if any

transactions are missing from the accounting records.

Cutoff testing.-Audit procedures are used to determine whether

transactions have been recorded within the correct reporting period.

Occurrence testing.-Audit procedures can be constructed to determine

whether the transactions that a client is claiming have actually occurred.

Existence testing.-Audit procedures are used to determine whether

assets exist.

Rights and obligations testing.-Audit procedures can be followed to

see if a client actually owns all of its assets.

Audit procedure steps involve:-

1. AUDIT PLAN

The business of the entity, its policy, plans and procedures. Its hierarchical
structure. The statutory and regulatory framework within which it operates.
The existing accounting and internal control system. The prevalent
management information system. The entity’s risk perception and risk
management plan.

2. Audit Program

An audit programme is a set of instructions which are to be followed by the

auditor for the proper execution of an audit.

3. Audit Sampling

Sampling refers to selection of a portion (sample) of the total (population),

on a certain basis so that the portion is representative of the total.

4. Audit Working Paper

Audit working papers include those papers and documents, which consist
of details about accounts, which are under audit.

5. Audit Files

Preparing files and keeping them safe is an important task of audit office
because entire work, present as well as future, depends upon these files.

6. Audit Evidence

The primary objective of internal audit is to enable the auditor express his
opinion on the efficacy and performance of the systems, procedures and
controls and the financial, cost and other statements generated by the
entity.

6. Analytical Procedures

The internal auditor carries out the analytical procedures initially to

understand the functioning of the entity, its environment and the risk of
material misstatement in the information on which the audit procedures will
be carried out and based on this understanding he plans the nature and
extent and timing of the audit procedures.
7. Method of Checking
There are different methods of checking, which are as follows:-

Routine checking ,Test checking, Checking in depth, Overall checking

AUDIT PROCEDURE

Audit procedures are used by auditors to determine the quality of the

financial information being provided by their clients. The exact
procedures used will vary by client, depending on the nature of the
business and the audit assertions that the auditors want to prove. Here
are several general classifications of audit procedures:

 Classification testing . Audit procedures are used to decide

whether transactions were classified correctly in the accounting
records. For example, purchase records for fixed assets can be
reviewed to see if they were correctly classified within the right
fixed asset account.
 Completeness testing . Audit procedures can test to see if any
transactions are missing from the accounting records. For
example, the client's bank statements could be perused to see if
any payments to suppliers were not recorded in the books, or if
cash receipts from customers were not recorded. As another
example, inquiries can be made with management and third
parties to see if the client has additional obligations that have not
been recognized in the financial statements.
 Cutoff testing. Audit procedures are used to determine whether
transactions have been recorded within the correct reporting
period. For example, the shipping log can be reviewed to see if
shipments to customers on the last day of the month were
recorded within the correct period.
 Occurrence testing. Audit procedures can be constructed to
determine whether the transactions that a client is claiming have
actually occurred. For example, one procedure might require the
client to show specific invoices that are listed on the sales ledger,
 along with supporting documentation such as a customer order
and shipping documentation.
 Existence testing. Audit procedures are used to determine
whether assets exist. For example, the auditors can observe an
inventory being taken, to see if the inventory stated in the
accounting records actually exists.
 Rights and obligations testing. Audit procedures can be
followed to see if a client actually owns all of its assets. For
example, inquiries can be made to see if inventory is actually
owned by the client, or if it is instead being held on consignment
from a third party.
 Valuation testing . Audit procedures are used to determine
whether the valuations at which assets and liabilities are recorded
in a client's books are correct. For example, one procedure would
be to check market pricing data to see if the ending values of
marketable securities are correct.

A complete set of audit procedures is needed before the auditor has

enough information to decide whether a client's financial statements
fairly represent its financial results, financial position, and cash flows.
 WHAT IS ADUIT?

“An Audit is an examination of such record to establish their reliability and

responsibility of statement drawn from them.”

Definition:-

“An audit may be said to be such an examination of the book of accounts

and voucher of a business which will enable the auditor to satisfy himself
that the Balance sheet is properly drawn up , so as to give a true and fair
view of the state of affair of business and whether the profit or loss for
Account gives a true and fair view of the profit or loss for the financial
period according to the best of his information and explanation given to him
and as shown by the books: and if not , in what respect he is not satisfied.”
 FUNCTION OF AUDIT

Following are the important functions of Audit:

1. Study the Accounting System

It is the basic function of auditing. In order to determine the nature, timing

and extent of the audit procedures auditor should study the accounting
system.

2. Internal Control System

It is a process which determines that management policies are carried out

according the accounting principles. This system is very useful to
safeguard the interest of the enterprise. The auditor determines the
effectiveness of this system.

3. Vouching

This function is essential to determine the accuracy of accounting record.

Through audit those documents can be checked which support and prove
the business transactions. All entries in books of accounts are made on the
basis of relevant vouchers.

4. Verification of Asset

It is the function of auditing that it should verify the assets of the business.
It is concerned with the determination of value, ownership and possession
of business asset. The auditor can check the existence of asset.

5. Legal Requirement

It is the function of auditing to verify that statements are prepared under the
legal requirements or not. There are various laws like company and income
tax ordinance which are introduced by the govt.
6. Liabilities Verification

The liabilities of the business can be verified from the books of accounts.
The auditor can write a letter to the creditors for the verification of liabilities.
The auditor must receive the certificate from the management in this
regard.

7. Capital and Revenue:-

Auditing should make difference between capital and revenue items. The
capital items are compared to note the financial position of the business.
The revenue items are compared to determine the income. The income
and expenses related to many years can be divided in current and coming
year.

8. Valuation of Liabilities:-

Through auditing value of liabilities can be checked from the books of

accounts and other papers. The auditor can also confirm the value from
outside sources. The value of liabilities is given in the balance sheet by the
management but it is the function of auditing which confirms this value.

9. Valuation of Asset:-

The management gives the value of assets and auditor can apply the
accounting principles to assess the value of assets. The auditor critically
examines and takes help from the expert.

10. Reporting:-

Auditing important function is reporting. Auditor is an independent person

and it is his duty to submit his report in writing. If he is satisfied he can
present clean report otherwise he can give qualified report.
 OBJECTIVE OF AUDIT
Basic objective of auditing is to prove true and fairness of results presented
by profit and loss account and financial position presented by balance
sheet. Its objectives are classified into two groups which are given below:
A. Primary Objectives of Audit
The main objectives of audit are known as primary objectives of audit. They
are as follows:
I. Examining the system of internal check.
II. Checking arithmetical accuracy of books of accounts, verifying
posting, costing, balancing etc.
III. Verifying the authenticity and validity of transactions.
IV. Checking the proper distinction of capital and revenue nature of
transactions.
V. Confirming the existence and value of assets and liabilities.
VI. Verifying whether all the statutory requirements are fulfilled or not.
VII. Proving true and fairness of operating results presented by income
statement and financial position presented by balance sheet.

B. Subsidiary Objectives of Audit

These are such objectives which are set up to help in attaining primary
objectives. They are as follows:
1. Detection and prevention of errors
2. Errors are those mistakes which are committed due to carelessness
or negligence or lack of knowledge or without having vested interest.
Errors are of various types. Some of them are:
a. Errors of principle
b. Errors of omission
c. Errors of commission
d. Compensating errors
3. Detection and prevention of frauds
Frauds are those mistakes which are committed knowingly with some
vested interest on the direction of top level management. Such frauds
are as follows:
a. Misappropriation of cash
b. Misappropriation of goods
c. Manipulation of accounts or falsification of accounts without any
misappropriation
4. Under or over valuation of stock
 Normally such frauds are committed by the top level executives of the
business. So, the explanation given to the auditor also remains false.
So, an auditor should detect such frauds using skill, knowledge and
facts.
5. Other objectives
a. To provide information to income tax authority.
b. To satisfy the provision of company Act.
c. To have moral effect
 SCOPE OF AUDIT
The Scope of an Audit are:

 Legal Requirements.
 Entity Aspects.
 Reliable Information.
 Proper Communication.
 Evaluation.
 Test.
 Comparison.
 Judgments.

1) Legal Requirements
The auditor can determine the scope of an audit of financial
statements in accordance with the requirements of legislation,
regulations or relevant professional bodies.
The state can frame rules for determining the scope of audit work. In
the same way, professional bodies can make rules to conduct the
audit.
2) Entity Aspects
The audit should be organized to cover all aspects of the entity as far
as they are relevant to the financial statements being audited.
A business entity has many areas of working. A small entity may
have few functions while a large concern has many functions. The
auditor has the duty to go through all the functions of the business.
The audit report should cover all functions so that the reader may
know about all the working of a concern.
3) Reliable Information
The auditor should obtain reasonable assurance as to whether the
information contained in the underlying accounting records and other
source data is reliable and sufficient as the basis for preparation of
the financial statements.
The auditor can use various techniques to test the validity of data. All
auditors while doing the audit work usually apply the compliance test
and substance test. The auditor can show such information in the
report.
4) Proper Communication
The auditor should decide whether the relevant information is
properly communicated in the financial statements.
 is an information system so facts and figures must be presented in
that the reader can get information about the business entity. The
auditor can mention this fact in his report.
The principles of accounting can be applied to decide about the
disclosure of financial information in the statements.
5) Evaluation
The auditor assesses the reliability and sufficiency of the information
contained in the underlying accounting records and other source data
by making a study and evaluation of accounting system and internal
controls to determine the nature, extent, and timing of other auditing
procedures.
6) Test
The auditing assesses the reliability and sufficiency of the information
contained in the underlying accounting records and other source data
by carrying out other tests, inquiries and other verification procedures
of accounting transactions and account balances as he considers
appropriate in the particular circumstances.
There are compliance test and substantive test in order to examine
the data. The vouching, verification and valuation technique is also
used.
7) Comparison
The auditor determines whether the relevant information is properly
communicated by comparing the financial statements with the
underlying accounting records and other source data to see whether
they properly summarized the transactions and events recorded
therein.
The auditor can compare the accounting records with financial
statements in order to check that the same has been processed for
preparing the final accounts of a business concern.
8) Judgments
The auditor determines whether the relevant information is properly
communicated by considering the judgment that management has
made in preparing the financial statements, accordingly.
The auditor assesses the selection and consistent application of
accounting policies, the manner in which the information has been
classified and the adequacy of disclosure.
 SIGNIFICANCE

1) Knowledge of True Economic Position of Business :- Audit

proves that statement of profit and loss and balance sheet prepared
by the organisation show true and fare view of it and item shown their
in truthful .It helpful in the determination of economic policy of the
organisation.
2) Helpful in computing various taxes:- The various tax authorities
are able to compute the tax payable by the organisation easily and
correctly when the books of accounts of such organisation are
audited and appended by an Auditor’s Report .The amount of Sales-
tax, Income – tax, Wealth –tax, etc.
3) Comparative Study of Business: - A sole-trader can compare the
accounts of current year with the account of previous years and the
and he can satisfactorily know the progress of his business firm.
4) Increase in efficiency: - It keeps the employees of the organisation
watchful land careful and to perform their duties and responsibilities.
5) Protection to investor: - They are surrounded by two obstacle i.e.,
the act and Auditor.
6) End of corruption: - If Audit is not done the employees of the
organisation can misappropriates goods and cash being fear free.
7) Determination of tax liabilities.
8) Helpful in admitting partner.
9) Increase in the goodwill.
10) Helpful in case the business is managed by other.
 Limitation

1) It is only test check- Since the number of transaction is very

large it is almost impossible for the auditor’s to check each and
every transaction. Hence only test checking done by him it is
possible that fraud and errors may escape such test checking.
He is merely watch dog and not a blood hound.

2) Based on internal check and control- Efficiency and

effectiveness of auditing is largely depended upon an efficient
internal check and internal control system

3) Lack of independence- The Auditor is appointed by

shareholder i.e. the shareholder having majority of share. As
result Auditor is hardly independent and cannot fairly.

4) Postmortem technique- Auditing begins where Accounting

end the Auditor may not be able to discover systematic
manipulation in the book of account at the preparatory stage.

5) Dependence on side information- If the person providing

information have themselves been the party to the
manipulation of the book of accounts these information etc.
may not be reliable.
 CLASSI FICATION OF AUDIT

AUDIT

According To
Organisation According to
Structure of Practical Utility
Business

Statutory Complete
Private Audit Partial Audit
Audit Audit

Government Continuous
Internal Audit Periodic Audit
Audit Audit

Interim Audit Cash Audit

Management
Cost Audit
Audit
 Classes of Audit
According to the Organization Structure of the Business

1) Statutory audit

By statutory Audit we mean the compulsory Audit under statute or law

the organization is establish under specific statute are bound to get their
account Audited.

It is legally compulsory for the following organisation to get their account

audited:-

Company act, 1956, 2013, and 2017

Banking companies act, 1949

Insurance companies act, 1938

Local bodies and local authorities

Public and charitable trust act, 1950

Co-operative society act, 1912

2) Private Audit

It is also known as voluntary Audit. The right, duties, qualifications,

remunerations and scope of duties of the auditor determine by mutual
agreement between the auditor and owner.

Sole proprietorship- The extent and the number of account to be

audited is decided by the owner of the business. The Auditors of
determine on the basis of contract between the client and auditor.

Partnership-Although it is not legally mandatory, yet most of the

partnership concerns get their account Audited. The term and condition
of appointment and scope of auditor work is based on mutual
agreements. If there is no such agreement the provisions of Indian
partnership act, 1932 shall apply.
Audit of other individuals & institution-Sometimes an individual with
large income and expenditures gets his accounts audited. Some other
institution like clubs and other welfare societies also get their accounts
audited.

3) Government audit

The audit of accounts of government departments and institute is known

as government audit.sec 2 (45) of the companies act 2013 state that
government companies means any copies in which not less than 51% of
the paid up share capital is healed by the central government or any
others which is subsidiary of government companies as thus define.

Example:-

 Heavy Electrical limited.

 Fertiliser Ltd.
 Hindustan Anti-Biotic Ltd.

4) Internal Audit

Internal Audit can be defined as “an independent, objective

assurance and consulting activity which involves a continuous and
critical appraisal of the functioning of an entity designed to add value
and improve an organization's internal control system, risk
assessment and management mechanism and overall governance
mechanism”.

The definition brings to the following points:

1. Independent and objective assurance.

2. Continuous and critical appraisal of the functioning.

3. To improve the effectiveness of the risk management, control and

governance process.
 Necessity of Internal Audit
The emergence of the corporate governance culture has witnessed
paradigm shift in the way today’s companies operate.

It is necessary that the systems are robust and flexible enough for
the organizations to be responsive and effective.

The audit function has changed to reflect this phenomenon over time
during the 20th century, the necessity of internalizing the audit
function was felt to tackle the issues related to non-compliance or
non-adherence to the internal operating procedures.

It was essential to observe whether the operating processes and

procedures in the organization are efficient and effective.

In the current parlance, the need for the internal audit has become
more comprehensive and has definitely scoped beyond mere
compliance.

The organizations of today look at the internal audit function to

provide the assurance on the following aspects of the business: ·

 To comment on the accuracy and reliability of the financial and other

information generated within the organization·
 To assess and suggest whether the internal policies & procedures
and the external laws are properly complied with·
 To identify and assess the risks associated with the assets and
comment whether they are providing a fair return to the company·
 To critically evaluate whether the operational resources are used
efficiently and economically.

 When Internal Audit is carried out for the first time, the ground rule for
Internal Audit needs to be laid down, inter alia, including;·
 The Internal Audit will primarily concentrate on flow of data and
justification of basis instead of vouching.
 The materiality of cost and product under consideration would always
be borne in mind during Internal Audit process.
 Objectivity in approach would be a consistent feature in Internal
Audit.
 Main thrust would always be on deviations and significance of
deviations with impact of the same on the performance of the
organization.
Objectives and Principles of Internal Audit
Internal audit primarily serves the following objectives:

1. Reviewing compliance with

(a) The policies and plans of the entity being audited.

(b) The relevant statutory and regulatory requirements.

(c) The internal and external norms, guidelines, financial and cost
accounting standards and procedures.

2. Ascertaining to what extent the existing internal control system is

being adhered to, assessing the efficiency of the internal control
system and suggesting improvement in the internal control system.

3. Reviewing the management information system to ascertain the

adequacy, relevance, reliability and timeliness of the system and
security of the information flowing through the system.

4. Assessment of the risks confronting the entity and the

effectiveness of the risk management system to mitigate the risk and
suggesting means for the improvement of the system. The auditor
may also identify risks and suggest ways to mitigate the same.

5. Ensuring optimum utilization of the resources of the entity which

include both tangible resources and intangible resource like time.

6. Providing a reasonable assurance that the financial statements

and the cost statements are free from material misstatement

7. Safeguarding the assets of the entity.

8. Timely identification of a liability of the entity, including contingent

liability.
 Basic Principles

1. Independence of the auditor is a primary requirement for any audit

which aims at ensuring that the outcome of the audit is not
prejudiced. Accordingly it is more important for the auditor to act
professionally, maintaining the highest levels of ethics and
competence and not to give in to any interference in performing
his duties.

2. Audit environment is determined by the nature of the organization,

its internal control system and the complexities of its activities.

3. The internal auditor should ensure confidentiality of the information

received by him in the course of the audit. The internal auditor is
primarily responsible for expressing his opinion on the areas
subjected to audit and therefore he has to take sufficient care to
be satisfied that he can adequately rely on the work performed by
other professionals/experts, before he uses the work done by
others in forming his opinion.

4. It also helps in current and future planning of the audit-work,

supervision and review of the audit functions.

5. Effective and timely conduct of any activity depends largely on the

efficiency of the planning which precedes the performance of the
activity.

6. The final output of the internal audit is the audit report which shall
be carefully drafted to ensure lucid communication of the findings
of the audit relating primarily to the shortcomings of the internal
control system, risk management system and the governance
processes and the measures required for correction and important.

According to practical utility

1) Complete Audit

An audit of both financial statements and the documents underlying them.

That is, a complete audit does not only look at financial statements to make
sure they make sense, it also makes sure that statements compare well wi
th the documents used to create them. Complete audits are less likely than
other audits to contain errors.

2) Partial Audit

An audit which is conducted considering the particular area of accounting is

known as partial audit. Under partial audit, audit of whole account is not
conducted. Audit of particular area where the owner thinks essential to
conduct audit will be conducted. Generally, transaction of business is
related to cash, debtor, creditor, stock etc. A business may conduct an
audit of any of these transactions.
An auditor should conduct audit of that transaction as per the scope
determined by the agreement. Method of conducting such audit is similar to
other audit but an auditor should sign the report clearing stating the 'partial
audit'. If it is not done so, an auditor will be liable for the loss which is
caused due to using the report as complete audit.

Objectives of Partial Audit

Partial audit has following objectives:

a) To know whether the capital is fully mobilized or not.

b) To clarify the doubts where the owner has suspected.
c) To conduct final audit in less time and in less expenses because
Particular area of account is checked in detail.

3) Continuous Audit

Continuous audit is an internal process that examines accounting

practices, risk controls, compliance, information technology systems and
business procedures on an ongoing basis. Continuous audits are usually
technology-driven and designed to automate error checking and data
verification in real time. A continuous audit driven system generates alarm
triggers that provide notice about anomalies and errors detected by the
system.
4) Periodical Audit

Periodic audit is done at the close of the financial year at the time of
preparing final accounts. The auditor visits the client only once in a year
and complete the examinations of all books and accounts. It covers entire
examination of books and completes verification of account. Periodic audit
is also known as final audit and complete Audit.

5) Interim Audit

An interim audit involves preliminary audit work that is conducted prior

to the fiscal year-end of a client. The interim audit tasks are conducted
in order to compress the period needed to complete the final audit.
Doing so benefits the client, which can issue its audited financial
statements sooner. An interim audit also helps the auditors, who now
have more time available during their peak audit season to engage in
activities for more clients.

An interim audit can also refer to a full audit that is conducted for an
interim period, such as for a quarter or half-year. This is a relatively
uncommon event, since publicly held companies only need to have a
review conducted at quarterly intervals, not a full audit. Thus, the
purpose of Interim Audit may be:

6) Cost Audit

The terminology issued by the CIMA defines Cost Audit as “the verification
of the correctness of cost accounts and of the adherence to the cost
accounting plan”.

ICWAI defines Statutory Cost Audit as a “system of audit introduced by the

Government of India for the review, examination and appraisal of the cost
accounting records and added information required to be maintained by the
specified industries”.

Cost Audit is a critical review undertaken for the purpose of:

(a) Verification of the correctness of cost accounts, and

(b) Checking that Cost Accounting Plan is adhered to.

7) Tax Audit

A tax audit is an examination of an organization's or individual's tax return

to verify that financial information is being reported correctly. While the
chances of being singled out for closer scrutiny are statistically low, there
are factors that could increase your odds of receiving an audit notice.
Fortunately, there are measures you can take now to minimize future
problems.

8) Management Audit

A systematic assessment of methods and policies of an organization's

management in the administration and the use of resources, tactical and
strategic planning, and employee and organizational improvement.

The objectives of a management audit are

(1)To establish the current level of effectiveness,

(2) Suggest improvements, and

(3) Lay down standards for future performance. Management auditors

(employees of the company or independent consultants) do not appraise
individual performance, but may critically evaluate the senior executives as
a management team.
 BASIC PRINCIPAL OF AUDITING

 Integrity, Objectivity and Independence: The auditor should

be honest and sincere in his audit work. He must be fair and
objective. He should also be independent.

 Confidentiality: The auditor should keep the information

obtained during audit, confidential. He should not disclose such
information to any third party. He should, keep his eyes and
ears open but his mouth shut.

 Skill and Competence: The auditor should have adequate

training, experience and competence in auditing. He should
have a professional qualification ( i.e. be a chartered
accountant) and practical experience. He should be aware of
recent developments in the field of auditing such as statement
of ICAI, changes in company law, decisions of courts etc.

 Working Papers: The auditor should maintain working papers

of important matters to prove that audit was conducted with due
care according to the basic principles.

 Planning: The auditor should plan his audit work. He should

prepare an audit programmed to complete the audit efficiently
and in time.

 Audit Evidence: The report of the auditor should be base on

evidence obtained in the course of audit. The evidence may be
obtained through vouching of transactions, verification of assets
and liabilities, ratio analysis etc.
 evaluation of Accounting System and Internal Control: the
auditor should ensure that the accounting system is adequate.
He should see that all the transaction have been properly
recorded. He should study and evaluate the internal controls.

 Opinion and Report: The auditor should arrive at his opinion

on the account based on the audit evidence and submit his
report. The opinion may be unqualified, qualified or adverse.
The audit report should clearly express his opinion. Law should
require the content and form of audit report.

Advantages of Audit
1) Access to the capital market: The public has to remain under the
security exchanges and the requirements given under it. Once the
auditing is done the accounts that are audited are easily accepted by
the Government such as Central banks, public authorities. This
carries greater authority standards for the account to be authorized.
2) Lower capital cost: This has reduced information that is associated
with the financial statements that have lower interest rates and return
on their investments. Sometimes this activity provides facilitated
settlements and claims of a partner. By performing the process of
auditing frauds and errors can be rectified on time.
3) Deterrent to fraud and inefficiency: Auditing that has been carried
out has to be within the claimed accounts department. In the event of
loss, the property that will maintain a fund is transferred. In case if the
public has separate ownership plan then the claims have to be
resolved from the insurance claims.
4) Operational improvements: An independent auditor can be
controlled and achieved operating efficiency within the client’s
organization. It has an influence on the staffs along with the members
of the client’s organization.
5) Gathering information about profit or loss: This gathering will
help in discussing the profit and loss of the company. Here
employees can disclose their ideas upon which they are lacking and
how can they overcome those obstacles.
6) Confidentiality: During the process of the external audit, there is
more private information such as internal employee salary, CPF, etc.
It may be significant for the person to learn about the organization. It
is because the auditor makes the consideration and conducts the
meetings that are to be held regarding the audit.
7) Settlement of claims: Settlement of claims demands the
enhancement and better atmosphere that are sequenced within the
organization. For accessing and to influence moral values one has to
restrain themselves from performing fraudulent activities.
8) Reports: It produces the report of the truth and fairness of the
reported audit. It involves financial statements that are more
 compatible when a person goes through the documents and reports
of the audit.
9) Analytical procedures: It can neither help in prioritizing the changes
and allocating them with the resources are recorded in the work
papers of audits. It also involves control environment and
appointment of analytical procedures of the system.

10) Settlement of claims: Some of the audited accounts that are

explained are defined and must fit into the claims so as to ensure the
recent files. It determines the value of the business so as to claim for
the purpose of the other networks.
 Disadvantage of Audit

1. Extra cost: Testing involves the extra cost to the organization which is
considered as a burden. It involves the disruptions of multiple cases. The
auditor has to concentrate more even though there are disruptions. Before
the audit begins the auditor must get the attention of all the staff members
of the organization.

2. Evidence: Evidence that is identified is more pervasive than conclusive.

The strength of submission of audited accounts makes major changes in
the accounts of the distribution of profits.

3. Harassment of staves: Since the employees cannot express their own

in terms of auditing, these changes are calibrated and the employees will
feel harassed due to the changes that are caused. Even if they try to
express their knowledge of new ideas, the organization may not entertain
the employees in these types of situations.

4. Unsuitable changes: The rules and regulations of business may vary

from time to time. It remains unstable when the program begins. It is
obvious that the company’s policies may not change periodically whereas
the rules and regulations may.

5. Chances of fraud: Since the information delivered after the audit

procedure is credential then there become more chances of getting the
situations where an individual will be forced to commit the crime. It
harasses the auditors to commit crime after the audit gets over.

6. Small concerns: Small-scale industries may usually proceed with

transactions that are usually completed within a shorter period of time.
Thus, auditing is not too important.
7. Problems in remedial measures: Here the problem is created in
remedial measures that are enhanced by the detailed interface of the data
of remedial measures. These remedial measures are not included in the
audit program.

8. Insufficient considerate: The education curve will be contented about

the business and insufficient relaxed networks and also offers
systematic internal recruitment. These may gravely obstruct the expense of
all the employees.

9. Not guaranteed: Auditing cannot provide any data that are analyzed
and prepared. It has financial accounts for the data that are provided. It is
disclosed based on the information and explanations that are agreed on by
the clients.

AUDIT PROCEDURE
 Audit Procedure

Audit plan

Audit Programme

Audit Sampling

Audit Working Paper

Audit Files

Audit Evidence

Analytical Procedure

Method of Checking

AUDIT PLAN
The audit plan is a comprehensive document which shall lay down
the areas to be covered by the audit, the manner in which the audit
will be conducted, the extent of assessment or verification to be done,
the resources to be employed and the distribution of total available
time among different activities, so that the overall objective of the
internal audit is fulfilled and the audit is conducted in accordance with
the terms of the audit engagement.

The audit planning shall begin with understanding:

1. The business of the entity, its policy, plans and procedures

2. Its hierarchical structure

3. The statutory and regulatory framework within which it operates

4. The existing accounting and internal control system

5. The prevalent management information system

6. The entity’s risk perception and risk management plan

7. The degree of complexity and materiality of the activities covered

by the terms of audit engagement.

The internal audit plan shall include:

1. The detailed program for review of different areas under audit

2. The audit procedures to be employed

3. The frequency and extent of the audit procedure

4. The criticality and complexity of specific areas requiring special

attention

5. The significant risk associated with a specific area requiring special

attention.

Audit Programme
An audit programme is a set of instructions which are to be followed by the
auditor for the proper execution of an audit. After the audit plan has been
developed, a detailed audit programme is formulated and written.

Objectives of Audit Programs

1. Audit program helps to check systematically the books of accounts which

help to conduct fair audit.

2. Audit program specifies the time period clearly, which helps to complete
the work of audit in less time.

3. Assistant should sign after the completion of work which specifies the
responsibility and accountability of staffs. It also helps to prove the
completion of task.

4. Review of proposed scope of audit preparing proper plan.

5. Audit program shows the way to the new staffs to perform work of audit.

Advantages of Audit Programme

The following are the advantages of an audit programme.

 i. An audit programme helps to ensure that all the critical areas are
covered during the audit appropriately.
ii. It helps to distribute work among the members of the audit team and
assistants as per their level of competence and experience.
iii. An audit programme gives instructions to the audit team and
decreases the scope for misunderstanding.
iv. It helps to fix the responsibility for the work done amongst the audit
team as the work done can be traced back to the individual in the
auditing staff.
v. It helps to assess the progress of work by ascertaining the part of the
audit work that has been completed against how much is left in order
to complete the audit successfully.
vi. An audit programme serves as evidence against a charge of
negligence.
vii. An audit programme also serves as an audit record that may come
into use for future references once the audit is completed
successfully.

Disadvantages of Audit Programme

The following are the disadvantages of Audit Programmes.

i. Rigidity: An audit programme does not possess the advantage of

being flexible as the same programme cannot be used for different
 types of organizations. Every business or entity has the separate and
unique issues that they face. Therefore, a single or same audit
programme cannot be laid down for every type of business.
ii. Decreases the Initiative of Efficient Staff: An audit programme
does nothing to promote the initiative of capable individuals.
Assistants and team members would not be able to suggest any
improvement in the set plan.
iii. Mechanical Audit Work: An audit programme is considered
mechanical that it ignores various other aspects such as internal
control.
iv. Overlooking New Areas: As time passes, new problems or issues
may arise during the audit, and they may be overlooked in the Audit
Programme.

Inclusions in an Audit Programme

The following should be evaluated before the formulation of an audit

programme.

 The Appointment Letter and the appropriate resolution for the

appointment.
 The terms of the operation which includes the reports required and
the manner of determining the audit fee
 The system of book keeping and the list of the books of account as
maintained by the entity.
 The particulars of the Directors, Promoters and their powers.
 Names of the individuals who maintain the books of accounts and
other authorized individuals.
 The Memorandum of Association, Articles of Association and
Partnership Deed as applicable.
 Details of the business of the client and its accounting systems by
assessing and reviewing the information on the following:
o Nature of business of the entity
o Internal Control System as well as the Manager controls
 The statement of profit and loss account, balance sheets, auditors’
and directors’ reports of the prior year and the reports of the internal
auditor.
 Analytical review procedures to:
o Identify the areas of accounts which are essential due to their
size.
o Highlight the unusual figures or relationships in the accounts.
o Design audit test that focuses on critical and unusual items.
o Obtain sufficient audit assurance to permit the reduction or
maybe, the elimination of thorough testing in certain areas.
 The assessment of audit risk by using professional judgement and
the audit procedures to make sure that it is decreased to an
acceptable low level.
 The preliminary estimates of materiality for the audit as a whole.
 The class of accounting transactions that are relevant and to make a
decision on the type of testing and samples.
 Selection of representative samples.
 Test of compliance in order to evaluate the reliability of critical
controls.
 Material weaknesses in the operation of the critical controls of
management.
 The performance of the analytical review procedures, substantive
tests of details to attain sufficient, reliable and relevant audit evidence
for each audit goal.
 Fundamental accounting assumptions
 Disclosure of the change in an accounting policy that would have a
material effect.
 The audit report from all the Branch Auditors and any reservation
made by a branch auditor which is appropriately dealt with in the
finalisation of accounts.
 The Working Papers that contain all the audit evidence and are
cross-referenced.
 Summary of the work done, issues, significant judgments and audit
conclusions.
 Review by a senior in charge of all the work done by assistants, audit
programme followed and the work performed as per the schedule.
 Updation of the audit working papers along with the permanent
records as well.
 Review of the unadjusted errors in order to determine if the individual
and aggregate effect is material.
 Compliance with the legal and regulatory requirements and with all
mandatory accounting standards as issued by the Institute.
 Post balance sheet events
 Formulation of the draft audit opinion.
 Comparison of the budgeted time to actual time and the reasons for
significant differences.
 The evaluation forms of the complete staff.
 Planning of the next year’s audit.

Audit Sampling
Sampling refers to selection of a portion (sample) of the total
(population), on a certain basis so that the portion is representative of
the total. Therefore one has to be careful about deciding on the size
of the sample and the manner of selecting the items from the
population to ensure that the sample actually represents the
characteristics of the population.

The selection can be done using both statistical and non-statistical

methods.

The statistical methods are those which use the random number table
or the theory of probability for selection of a sample.
 In case of test of controls where the auditor is trying to ascertain the
effectiveness of the internal control system, the auditor’s analysis of
the nature and cause of error is more important than the statistical
analysis of mere presence or absence of error and therefore in such
situation, non-statistical sampling approach is preferred..

Now, in audit it is neither possible nor desirable to examine all the

transactions or activities of an entity within the time-frame of an audit.

Therefore the auditor has to decide upon samples from the classes of
transactions covered by the audit on which the audit procedures are
applied to obtain sufficient appropriate audit evidence that would
enable the auditor to have reasonable assurance about the
characteristics of the class of transactions.

However, it is not necessary that selective verification will be done in

respect of all classes of transactions and the auditor might decide on
examination of the total population in respect of a particular type of
transaction, where in his opinion there is a high risk of drawing an
incorrect conclusion based on selective verification and he requires a
higher level of confidence about that class of transactions.

The size of audit samples shall largely depend on the level of

confidence the auditor has on the efficacy and actual performance of
the internal control system and the auditor’s acceptance of the
tolerable error (maximum possibility of the sample not representing
the population) in sampling.

In order to lower the sampling error and thus the risk of drawing an
incorrect conclusion, size of the sample should be bigger.

The internal auditor shall first decide upon what would be the
appropriate population for deriving a particular audit assurance and
whether the population is complete.

For example to derive a assurance about the balances of debtors

the complete list of sales invoice, debit/credit notes and complete
details of receipts from debtors shall constitute the appropriate
population.

The internal auditor may classify an appropriate population meant for

a certain audit procedure into various categories (or strata) based on
 certain criteria (e.g. monetary value) and then decide on different
sample size for different categories.

As for example, for checking of sales invoices, the invoices may be

grouped into three categories (high, medium and low) based on
monetary value and the auditor may decide to go for 100%
verification of the high value invoices and no sampling is involved, for
verification of the medium value invoices the auditor may go for a
sample size of 60% of the population of medium value invoices and
for verification of the low value invoices the auditor may go for a
sample size of 30% of the population of low value invoices.

After selection of samples and conducting audit procedures on them

the auditor shall evaluate the findings to determine whether the
assessment of the relevant characteristics of the population is
confirmed or whether it needs to be revised.

The internal auditor shall document the issues related to the

sampling process which will help the auditor to substantiate his
decisions.

Audit Working Paper

Audit working papers include those papers and documents, which consist
of details about accounts, which are under audit. They are the written,
private materials, which an auditor prepares for each audit. They describe
the accounting information, which he obtained from his client, the method
of examination used, his conclusions and the financial statements

Objectives of Audit Working Papers

1. The working papers serve the auditor both as useful audit tool as well as
a permanent record of the audit work performed.

2. They are useful to the auditor to control the current year’s audit work.

3. They constitute a reliable guidance for planning the future audit

assignments.
4. A review of the audit working papers gives an assurance that the audit
work is both accurate and complete

Contents of Audit Working Papers

AAS 3 states working papers should record the auditor’s plan, the nature,
timing and extent of the audit procedures performed; and the conclusions
drawn from the evidence obtained.

Generally, audit working papers consist of the following details:

1. Schedule of debtors and creditors.

2. Trial Balance.
3. Certificate of officials regarding certain important matters like bad
debts, valuation of stock, unpaid expenses, accrued incomes, etc.
4. Statement of depreciation.
5. Correspondence between the auditor and the debtors, creditors, etc.
of the client.
6. Investment Schedules.
7. Confirmation by the bank regarding the bank balances of the client.
8. Bank Reconciliation Statement.
9. Important extracts from the minute books such as agreement with
vendors, hire purchasers, selling agents, etc.
10. Detail of cash balance checked.
11. Adjustment entries.
12. Contingent liabilities certified by the management.
13. Draft financial accounts.
14. Details of clarifications made during the course of audit.
15. A copy of the auditor’s book.
16. Letters of representation.
17. Correspondence from legal advisors
18. Pertinent memoranda relating to the audit.
19. Data relating to the review of internal control.
20. Stock holder equity and the minutes.
21. Test of transactions.
 Audit Files
Preparing files and keeping them safe is an important task of audit office
because entire work, present as well as future, depends upon these files.
The audit files can be of two types, namely:

(1) Permanent Audit Files.

(2) Current Audit Files.

A permanent audit file normally includes:

1) Information concerning the legal and organizational structure of the

entity. In the case of a company, this includes the Memorandum and
Articles of Association. In the case of a statutory corporation, this
includes the Act and Regulations under which the corporation
functions.
2) Extracts or copies of important legal documents, agreements and
minutes relevant to the audit.
3) A record of the study and the evaluation of the internal controls
related to the accounting system. This might be in the form of
narrative descriptions, questionnaires or flow charts, or some
combination thereof.
4) Copies of audited financial statements for previous years.
5) Analysis of significant ratios and trends.
6) Copies of management letters issued by the auditor, if any. Record of
communication with the retiring auditor, if any, before acceptance of
the appointment as auditor.
7) Notes regarding significant accounting policies.
8) Significant audit observations of earlier years.

The current file normally includes:

1) Correspondence relating to acceptance of annual reappointment.

2) Extracts of important matters in the minutes of Board Meetings and
General Meetings as relevant to audit.
3) Evidence of the planning process of the audit and audit programme.
4) Analysis of transactions and balances.
5) A record of the nature, timing and extent of auditing procedures
performed, and the results of such procedures.
6) Evidence that the work performed by assistants was supervised and
reviewed.
7) Copies of communication with other auditors, experts and other third
parties.
8) Letters of representation or confirmation received from the client.
9) Conclusions reached by the auditor concerning significant aspects of
the audit, including the manner in which exceptions and unusual
matters, if any, disclosed by the auditor’s procedures were resolved
or treated.
10) Copies of the financial information being reported on and the
related audit reports.
 Audit Evidence

The primary objective of internal audit is to enable the auditor express

his opinion on the efficacy and performance of the systems,
procedures and controls and the financial, cost and other statements
generated by the entity.

For this purpose, the auditor carries out audit procedures to derive
sufficient appropriate audit evidence and draws conclusion there from
which forms the basis of his opinion.

Now, “sufficiency” refers to the quantum of the audit evidence and

“appropriateness” refers to the relevance and reliability but what
constitutes “sufficient appropriate audit evidence” depend on the
professional judgment of the auditor.

The internal auditor’s judgment as to “sufficient appropriate audit

evidence” is influenced by the nature and materiality of the item,
nature and size of the business, efficacy and functioning of the
controls and his assessment of the risk of a material misstatement.

The source of the audit evidence which can be internal or external

and in whose custody it is being kept, decides the level of reliability of
the evidence, to a great extent.

The main types of audit evidence in order of their reliability are:

(a) Documentary evidence originated from and held by third party.

(b) Documentary evidence originated from third party and held by the
entity.

(c) Documentary evidence originated from the entity and held by third
party.

(d) Documentary evidence originated from and held by the entity.

The internal auditor obtains the audit evidences through:

(a) Compliance procedures which are tests of control and are
intended to obtain reasonable assurance that the controls on which
audit reliance are to be placed are in effect

(b) Substantive procedures which are performed to obtain satisfaction

about the completeness, validity and accuracy of the data on which
the audit procedures are carried out.

The substantive procedures are of two types:

a) Tests of details of transactions and balances

b) Analysis of significant ratios and trends and resultant enquiry
into unusual fluctuations and items.

The internal auditor obtains evidence by performing one or

more of the following procedures:

a) Inspection of records or tangible assets

b) Observation of a process or activity being performed by others
c) Inquiry whether formal written inquiry or informal oral inquiry,
seeking relevant information from competent persons whether
within or outside the entity and confirmation received in
response to the inquiry
d) Checking the arithmetical accuracy of the records and doing
independent calculations and
e) Analysis of significant ratios and trends and resultant enquiry
into unusual fluctuations and items.

Analytical Procedures
The internal auditor carries out the analytical procedures initially to
understand the functioning of the entity, its environment and the risk
of material misstatement in the information on which the audit
procedures will be carried out and based on this understanding he
plans the nature and extent and timing of the audit procedures.
The analytical procedures are applied again to corroborate the
conclusions drawn from the evidence arising out of the tests of
details, based on the findings of which the auditor might decide to
apply further audit procedures to derive higher level of assurance
about the evidence.
Analytical procedures also involve establishing relationships between
various elements of the financial data or non-financial data or both
and drawing conclusion from there.
Where the result of the analytical procedures show significant
deviations or fluctuations or establish relationships that are
inconsistent with the results of other audit procedures or the expected
results the auditor shall obtain sufficient explanation from the
management to remove the doubt about any irregularity or obtain
appropriate corroborative evidence or apply further audit procedures
until the auditor is satisfied with the results.
Where the deviation, fluctuation or relationship is not satisfactorily
explained or where the auditor is not satisfied with the results of
further audit procedures it might be indicative of possible irregularity
which should be brought to the notice of the management and
suitable course of action may be suggested.
For finding out the similarity or divergence, comparison of the derived
ratio and trends is generally done with:
(a) The documents and reports of the previous periods
(b) Projections or budget of the entity
 (c) Information from the industry like the industrial standard or
comparable data from a similar entity within the same industry
(d) The estimates of the internal auditor based on his study of the
ratios and trends of the entity.
The methods and extent of application of analytical procedures
depends on the judgment of the internal auditor based on:
(i) Nature of the entity
(ii) Availability, reliability and relevance of the information available
(iii) Source of the information e.g. internal or external
(iv)Comparability of the information
(v) Efficiency and effectiveness of a particular procedure to achieve a
particular objective
(vi)Experience from the previous internal audits conducted at the
entity
(vii) Effectiveness of the controls over the preparation of the
information.
However, the extent of reliance the internal auditor shall place
on the results of the analytical procedures will depend on the
judgment of the internal auditor based on:
(a) Materiality of the items involved
(b) Outcome of the other audit procedures
(c) The extent to which the outcome of the analytical procedure can
be relied for deriving assurance about a particular item
(d) Whether the systems, procedures and controls as a whole are
efficient and functioning effectively.
Method of Checking
There are different methods of checking, which are as follows:

1) Routine checking
2) Test checking
3) Checking in depth
 4) Overall checking
Routine Checking

Whether a business is big or small, the record of its daily transactions is

kept in the books of accounts. The daily checking of these books of
accounts under audit is called Routine Checking.

Purpose of Routine Checking

1. Making totals and sub-totals of primary books of accounts, carrying
them forward to the next page, and calculating the balances and their
checking.
2. Checking of the ledger postings derived from the primary books and
journal, and to see whether they are properly done or not.
3. To see the totals of debits and-credits of different accounts and their
balances.
4. To check whether balances of various accounts are properly taken to
the Trial Balance, or not.

Objectives of Routine Checking

1. To know the mathematical accuracy of the accounts entered in the
primary books of accounts.
2. To know the regularity of accounting in primary books of accounts.
3. By making use of distinct Ticks and Marks to know that no changes
are made in figures after the check.
Test Checking

Test checking in Audit means checking a few transactions selected at

random from a large number of transactions. It is also known as “Selective
Verification” or “Sampling Process“.

Checking in Depth

Audit or checking in depth means examination of a transaction thoroughly

from beginning to end in the order of its happening or in sequence. In this
all the entries of the accounts are not examined, rather a few selected are
examined and verified in all its aspect. This method is based on test
checking.

Overall Checking

A detailed or comprehensive examination of accounts is known as overall

checking. This includes all those techniques and procedures used by the
auditor to detect the errors and frauds are not detected during routine
checking.
Audit procedures followed by Ojha & Associates
The primary goal Ojha & Associates at the time of involving in any audit
engagement is to provide the opinion on Financial Statements in
accordance with Indian Standards on Auditing (ISA) as well as International
Standards on Auditing (ISA). Ojha & Associates also seek to provide
auditing and management consultancy services that are innovative,
efficient and most importantly responsive to the client’s needs.

It is another fact that before starting the audit procedure there presents a
series of more procedures. For example audit engagement letter, audit
clearance letter, team meeting etc.

Audit Procedures followed:-

There are seven steps involved in the procedures that come one after
another. The procedures followed by the Ojha & Associates are basically
inspired by the approaches suggested by ICAI in Audit Practice Manual.
Steps are as follows:

1. Identity Overall Goals

2. Gather & Evaluate Initial Information
3. Assess General Risks
4. Assess Account Specific Risk
5. Develop Efficient And Effective Audit Plan Program
6. Conduct Audit Testing
7. Evaluate And Communicate Audit Results
 RESEARCH METHODOLOGY

INTRODUCTION

This chapter focuses on research methodology that is been used

is the study.

RESEARCH TYPE- Descriptive Research

DATA COLLECT-This research include only secondary data

through which the study is been conducted.

SECONDARY DATA- It’s include

 ARTICLES
 BOOKS-AUDITING (SBPD PUBLICATION-2011-12)
 www.indiamart.com
 www.indiafilings.com
 www.taxmann.com
 https://www.seminarsonly.com/Engineering-
Projects/Finance/Audit-Of-Bank.php
https://studypoints.blogspot.com/2011/09/explain-functions-of-
audit-or-
 auditing_3520.htmlhttps://accountlearning.blogspot.com/2012/01
/objectives-of-audit.html
 https://iedunote.com/audit-scope
Audit conclusions and reporting are one of the principles governing an
audit. Reporting is the last procedure of the process of an audit.

An audit involves the following steps: Gathering of audit evidence,

evaluation of the evidence, deciding on their reliability and acceptability,
drawing a conclusion based on such evaluations, forming an opinion based
on a set of conclusions and expressing an opinion. The auditor should get
sufficient and appropriate audit evidence both at the transaction level, as
well as the account level. He should evaluate the adequacy of the evidence
in his possession, both in terms of quality and quantity. The auditor should
draw a conclusion on each of the line items of the financial statements,
based on the transactions examined by him.

The definition of internal audit refers to internal audit as “consulting activity

which involves a continuous and critical appraisal of the functioning of an
entity”.

The goal of an audit is to form and express an opinion on financial

statements. The audit is performed to get reasonable assurance on
whether the financial statements are free of material misstatement.

Audit procedures are used by auditors to determine the quality of the

financial information being provided by their clients. The exact
procedures used will vary by client, depending on the nature of the
business and the audit assertions that the auditors want to prove.
www.indiamart.com

www.indiafilings.com

www.taxmann.com

https://www.seminarsonly.com/Engineering-Projects/Finance/Audit-Of-
Bank.php

https://studypoints.blogspot.com/2011/09/explain-functions-of-audit-or-

auditing_3520.htmlhttps://accountlearning.blogspot.com/2012/01/objectives
-of-audit.html

https://iedunote.com/audit-scope